China and Russia Are Plotting to Ditch the Dollar—Will Bitcoin Rule the World?

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One cannot but observe with mild astonishment the declaration of China’s mandarins, who have very recently directed their state-owned banks to adopt a less… affectionate relationship with the American dollar. The matter has, in consequence, occasioned no small degree of elevation in Bitcoin’s social prospects. 👀

For purposes of enlightened conversation (and perhaps a touch of amusement), BeInCrypto did dialogue with learned gentlefolk from VanEck, CoinGecko, Gate.io, HashKey Research, and Humanity Protocol—an assembly more fashionable than a ball at Netherfield—regarding the pretensions of Bitcoin to rival the grand old US dollar. Some claim Bitcoin may yet sweep into the parlours of global geopolitics, ostentatious as a colonel in new boots.

The De-Dollarization Cotillion

Ever since the dreadful affair of the 2008 financial crisis (a calamity which quite ruined the season for many), China has been growing rather weary of its dependency on American currency. Now, the people charged with the nation’s banking affairs have instructed their institutions to abstain—delicately, but firmly—from excess dollar purchases. The trade conflict with that singularly energetic Mr. Trump played no minor part.

China is, it seems, in splendid company; Russia’s reputation for attracting Western frostiness (particularly following that disagreeable business in Ukraine) remains unequalled. A veritable cascade of sanctions followed, causing Russia to say “nyet” to American dollars and euros on its own exchange, and, in an act of supreme discretion, to squirrel away some Bitcoin for international trade. Finesse, ladies and gentlemen, must sometimes wear digital shoes.

Even Rosneft—whose bonds now boldly declare for the renminbi—demonstrates that the love affair with Western money is, for some, entirely over. It is all rather like casting off an unsuitable suitor for a more alluring companion.

India, for her part, is arranging oil trysts in Rupees (how daring!), and negotiating group settlements with her cleverest banking friends. In short, there are more knots in the global currency petticoat than in Lady Catherine’s best lace.

Against this backdrop, Bitcoin emerges, grinning broadly and ready to catch the eye of nations eager to break up with the US dollar. Oh, the delicious scandal. 

Why Nations are Flirting With Bitcoin

The new infatuation with digital currencies, it seems, is not passing. China and Russia have already conducted a few energy affairs—one suspects without so much as a blush—settled in Bitcoin and other “virtual” baubles.

“Sovereign adoption of Bitcoin is accelerating this year as demand grows for neutral payments rails that can circumvent USD sanctions,” remarked Matthew Sigel of VanEck, no doubt adjusting his cravat with satisfaction.

France’s Minister of Digital Affairs, never one to be outdone by the English, has taken up a proposal to use excess electricity to mine Bitcoin—which, in Regency terms, is rather like heating one’s pudding with spare gigawatts.

Meanwhile, Pakistan eyes its own surplus electricity for Bitcoins and artificial intelligence—what a modern courtship!

State politics in the United States is likewise abuzz. New Hampshire’s House, in an act nearly as divisive as a dinner seating chart, has advanced a bill to dedicate a portion of state funds to Bitcoin and precious metals. Arizona, Texas, and Oklahoma all elbow one another gracefully as if in a minuet, each wishing to be first.

Experts agree: This is merely the opening chapters of the Season, not its denouement.
Good luck getting Lady Bracknell’s approval, though.

VanEck’s Daring Prediction: Bitcoin, Future Belle of the Reserve Ball?

Mr. Sigel is confident that by the year 2025, Bitcoin will waltz onto the world stage as a legitimate currency for international trade, perhaps settling as much as 10% of global commerce and 5% of domestic trade. Central bankers, who once looked askance at such digital upstarts, may soon allocate a dainty 2.5% of their assets to Bitcoin. We live in strange and interesting times.

for should these efforts continue, the dollar’s dominance may be toppled, with implications for that most American of pastimes—borrowing prodigiously to fund the national lifestyle.

“Broader de-dollarization efforts threaten the status of the dollar’s global reserve currency, and that will have quite the profound impact on the US and its economy,” Chan told BeInCrypto, presumably waving a fan to emphasise the point.

The General Decay of Currency—A Comedy of Errors

Mr. Sigel’s research uncovers depreciation of the world’s most fashionable currencies: the dollar, yen, pound, and euro, particularly when crossing borders. A void is left, much as when one’s host neglects to refill the punchbowl, which Bitcoin stands eager to fill.

“This shift is less about promoting the yuan and more about escaping the capriciousness of US sanctions and the melodrama of SWIFT,” Sigel added, perhaps suppressing a wry smile. “Digital assets such as Bitcoin—neutral, non-sovereign, yet tantalizingly liquid—are ready to make their entrance.”

Indeed, Bitcoin’s lack of allegiance has its charms, not unlike a mysterious gentleman at a masked ball.

Bitcoin: The Non-Sovereign Suitor

Bitcoin, unlike its fiat rivals and the much-gossiped-about CBDCs, accepts patronage from no nation. In the current climate of geopolitical melodrama, this is increasingly desirable—unless, of course, you happen to be a central banker with a penchant for control.

“When old money proves fickle, new love is found in Bitcoin’s transparent ledger,” remarked Terence Kwok of Humanity Protocol. “In uncertain times, innovation finds its cue and gallops onto the floor.”

Bitcoin’s supply—delightfully limited and entirely indifferent to inflation—offers shelter to nations whose native currencies are left, shall we say, wilting.

“Bitcoin stands apart from centralised fiat with its scarcity and independence from monetary caprice. It may serve as a hedge for those weary of fiat depreciation and the precariousness of dollar dominance,” commented Kevin Guo, Director of HashKey Research, who probably has a soft spot for gold-backed ledgers as well.

cross-border payments, inflation hedging, and, naturally, impressing one’s more adventurous friends.

Bitcoin Faces Its Own Mr. Collinses

As a debutante, Bitcoin suffers the usual awkwardness: market volatility, incomplete regulatory fashion sense, patchy global infrastructure, and surges of public enthusiasm not always grounded in reason. Not everyone is ready to dance.

“As with any emerging asset, Bitcoin faces volatility and evolving regulations that could affect its adoption,” lamented Lee, examining a cracked teacup for symbolism.

Kwok added that Bitcoin’s price swings make it altogether unsuited for one’s daily shopping—or as a main reserve asset (unless you like living dangerously). Major powers can slow its entry further by clamping down on crypto out of sheer irritation. 💃🕺

Meanwhile, dollar-backed stablecoins are frankly upstaging Bitcoin in cross-border payments for their lack of drama.

“Stablecoins—admired for their steadiness and resemblance to the entirely undramatic US dollar—are currently the preferred tool for international settlements, whilst Bitcoin languishes (with a certain fatal grandeur) as a store of value or speculation toy,” Guo explained, possibly fighting back a yawn.

To make things worse, the Bitcoin network has recently been more sluggish than Miss Bates after too much gooseberry wine.

The Network’s Delicate Constitution

In this year of our Lord, Bitcoin’s network has slowed, despite a bullish reputation. On-chain fees have fallen to their lowest in ages—scarcely enough to tip one’s hat at.

“Usage has waned, transactions are down, and the network activity would hardly cause a ripple at Almack’s,” Guo remarked dryly.

Consider the data: from 610,684 transactions in November, we’ve dwindled to 376,369 by April! Active addresses have similarly fled, which must distress Bitcoin’s chaperones. 😱

Active addresses: from nearly 900,000 to just above 600,000—decidedly not the sort of attendance one hopes for at a proper assembly.

The decline suggests a lack of interest in using the network for settlements or business. Bitcoin may require a new wardrobe designer and a robust footman—urgently.

Scaling the Party—Can Bitcoin Keep Up with the Dance Cards?

The Lightning Network offers some hope for increased throughput, but in its present state, Bitcoin processes barely seven dances per second—while Visa, the belle of the ball, shuffles 65,000! If expansion fails to catch on, the party may be over before it’s begun.

“If Lightning Network and kin do not become fashionable, Bitcoin shall remain slow-footed and unable to meet global traffic. Furthermore, the diminishing block rewards for miners threaten the network’s security, and nobody wishes to see the orchestra wander off before midnight,” Guo declared with a grimace.

The drama continues. Mainstream adoption will require overcoming these obstacles: scalability, price theatrics, legal uncertainties, stablecoin competition, and network reliability. One can almost hear Mrs. Bennet fainting at the prospect.

Yet, for all the speculation, Bitcoin seems likely to claim a respected place among the world’s monetary suitors—though perhaps not the title of Mr. Darcy. The established order will not be overturned so easily, but it will certainly have to share the drawing-room. 🫖

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2025-04-16 01:18